Not to be left behind by JPMorgan (NYSE:JPM) and Wells Fargo (NYSE:WFC), Citigroup (NYSE:C)
announced a respectable set of results for its second quarter,
featuring much of the same “better fee income, lower credit costs, but
tighter spreads and weak lending” themes we have seen and expected for
this quarter. Citi continues to make progress pulling itself out of its
own credit/loan loss mess, and relative normalcy seems to be in sight.
Citi is a curious stock when it comes to valuation, though. While the
market seems willing to assume that the bank will return to a low
double-digit ROE for the long-term, investors appear to be awarding the
company a lower tangible book value multiple than would otherwise seem
fair relative to the returns it generates on assets. In any case, these
shares appear to be somewhat undervalued, but don't seem like a major
opportunity at this point.
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